Prostitution is a main component of the sex industry and may take place in a brothel, at a facility provided by the prostitute, at a client's hotel room, in a parked car, or on the street. Often this is arranged through a pimp or an escort agency. Prostitution involves a prostitute or sex worker providing sexual services to a client. In some cases, the prostitute is at liberty to determine whether she or he will engage in a particular type of sexual activity, but forced prostitution and sexual slavery does exist in some places around the world.

The legality of prostitution and associated activities (soliciting, brothels, procuring) varies by jurisdiction. Yet even where it is illegal, a thriving underground business usually exists because of high demand and the booming revenue that can be made by pimps, brothel owners, escort agencies, and traffickers.[4]

Prostitution and the operation of brothels is legal in some countries, but illegal in others. For instance, there are legal brothels in Nevada, USA, due to the legalization of prostitution in some areas of the state. In countries where prostitution and brothels are legal, brothels may be subject to many and varied restrictions. Forced prostitution is usually illegal as is prostitution by or with minors, though the age may vary. Some countries prohibit particular sex acts. In some countries, brothels are subject to strict planning restrictions and in some cases are confined to designated red-light districts. Some countries prohibit or regulate how brothels advertise their services, or they may prohibit the sale or consumption of alcohol on the premises. In some countries where operating a brothel is legal, some brothel operators may chose to operate illegally.

Some men and women may travel away from their home to engage with local prostitutes, in a practice called sex tourism, though the destination pattern tends to differ between them.[7] Male sex tourism can create or augment demand for sex services in the host countries, while female sex tourism tends not to use existing sex facilities.[7] Like tourism in general, sex tourism can make a significant contribution to local economies, especially in popular urban centers. Sex tourism may arise as a result of stringent anti-prostitution laws in a tourist's home country, but can create social problems in the host country.

Businesses that offer prostitution services tend to cluster around military bases. The British naval port of Portsmouth had a flourishing local sex industry in the 19th century, and until the early 1990s there were large red light districts near American military bases in the Philippines. The Monto red-light district of Dublin, one of the largest in Europe, gained most of its custom from the British soldiers stationed in the city; indeed it collapsed after Irish independence was achieved and the soldiers left. The notorious Patpong entertainment district in Bangkok, and the city of Pattaya, Thailand, started as R&R locations for US troops serving in the Vietnam War in the early 1970s. Sex industries are also small but growing in several college towns.[8]

Prostitution is extremely prevalent in Asia, particularly in Southeast Asian nations such as Indonesia, Malaysia, Philippines, and Thailand.[9] Due to the longstanding economic instability of many of these nations, increasing numbers of women have been forced to turn towards the sex industry there for work. According to Lin Lim, an International Labour Organization official who directed a study on prostitution in Southeast Asia, "it is very likely that women who lose their jobs in manufacturing and other service sectors and whose families rely on their remittances may be driven to enter the sex sector."[9] The sex industry of these countries has consequently grown to become their dominant commercial sector. Conversely, the sex industry in China has been revived by the nation's recent economic success. The nation's liberal economic policies in the early 1980s have been credited with revitalizing the sex industry as rural communities rapidly expand into highly developed urban centers.[10] A typical example of this can be found in the city of Dalian. The city was declared a special economic zone in 1984; by the twenty-first century what had been a small fishing community developed an advanced commercial sector and a correspondingly large sex industry.[10] A large portion of China's sex workers are immigrants from other Asian nations, such as Korea and Japan.[11] In spite of these circumstances, most Asian countries do not have strong policies regarding prostitution. Their governments are challenged in this regard because of the differing contexts that surround prostitution, from voluntary and financially beneficial labor to virtual slavery. The increasing economic prominence of China and Japan have made these issues a global concern.[9] As a result of Southeast Asia's lax policies regarding prostitution,[9] the region has also become a hotbed for sex tourism, with a significant portion of this industry's clients being North American or European.[12]

In addition, like any other industry, there are people who work in or service the sex industry as managers, film crews, photographers, website developers and webmasters, sales personnel, book and magazine writers and editors, etc. Some create business models, negotiate trade, make press releases, draw up contracts with other owners, buy and sell content, offer technical support, run servers, billing services, or payroll, organise trade shows and various events, do marketing and sales forecasts, provide human resources, or provide tax services and legal support.

Usually, those in management or staff do not have direct dealings with sex workers, instead hiring photographers who have direct contact with the sex workers. Pornography is professionally marketed and sold to adult webmasters for distribution on the Internet.

Other members of the sex industry include the hostesses that work in many bars in China. These hostesses are women who are hired by men to sit with them and provide them with company, which entails drinking and making conversation, while the men flirt and make sexual comments.[14] A number of these hostesses also offer sexual services at offsite locations to the men who hire them. Although this is not done by every woman who works as a hostess in the bars of China, the hostesses are all generally labeled as "grey women". This means that while they are not seen as prostitutes, they are not considered suitable marriage partners for many men. Other woman who are included in the "grey women" category are the permanent mistresses or "second wives" that many Chinese businessmen have.[14]

The Chinese government makes efforts to keep secret the fact that many of these hostesses are also prostitutes and make up a significant part of the sex industry. They do not want China's image in the rest of the world to become sullied. Hostesses are given a significant degree of freedom to choose whether or not they would like to service a client sexually, although a refusal does sometimes spark conflict.[15]

The first home-PCs capable of network communication prompted the arrival of online services for adults in the late 1980s and early 1990s. The wide-open early days of the World Wide Web quickly snowballed into the dot-com boom, in-part fueled by an incredible global increase in the demand for and consumption of pornography and erotica. Around 2009, the U.S. porn industry's revenue of $10–15 billion a year was more than the combined revenue of professional sports and live music combined and roughly on par or above Hollywood's box office revenue.[16][17]

There is mixed evidence on the social impact of pornography. Some insights come from meta-analyses synthesising data from prior research. A 2015 meta-analysis indicated that pornography consumption is correlated with sexual aggression.[18] However, it is unknown if pornography promotes, reduces or has no effect on sexual aggression at an individual level, because this correlation may not be causal. In fact, counterintuitively, pornography has been found to reduce sexual aggression at a societal level. A 2009 review stated that all scientific investigations of increases in the availability of pornography show no change or a decrease in the level of sexual offending.[19] The question of whether pornography consumption affects consumers' happiness was addressed by a 2017 meta-analysis. It concluded that men who consume pornography are less satisfied with some areas of their lives, but pornography consumption does not make a significant difference in other areas, or to the lives of women.[20] Additionally, a sample of Americans revealed in 2017 that those who had viewed pornography were more likely to experience romantic relationship breakup than their non-pornography watching counterparts, and that the effect was more pronounced with men.[21]

While the legality of adult sexual entertainment varies by country, the use of children in the sex industry is illegal nearly everywhere in the world.

Commercial sexual exploitation of children (CSEC) is the "sexual abuse by the adult and remuneration in cash or kind to the child or a third person or persons. The child is treated as a sexual object and as a commercial object".[22]

CSEC includes the prostitution of children, child pornography, child sex tourism and other forms of transactional sex where a child engages in sexual activities to have key needs fulfilled, such as food, shelter or access to education. It includes forms of transactional sex where the sexual abuse of children is not stopped or reported by household members, due to benefits derived by the household from the perpetrator. CSEC is prevalent in Asia and parts of Latin America.

The sex industry is very controversial, and many people, organizations and governments have strong moral objections to it, and, as a result, pornography, prostitution, striptease and other similar occupations are illegal in many countries.

Dolf Zillmann asserts that extensive viewing of pornographic material produces many sociological effects which he characterizes as unfavorable, including a decreased respect for long-term, monogamous relationships, and an attenuated desire for procreation.[24] He claims that pornography can "potentially undermine the traditional values that favor marriage, family, and children" and that it depicts sexuality in a way which is not connected to "emotional attachment, of kindness, of caring, and especially not of continuance of the relationship, as such continuance would translate into responsibilities".[25]

Additionally, some researchers claim that pornography causes unequivocal harm to society by increasing rates of sexual assault,[24][26] a line of research which has been critiqued in "The effects of Pornography: An International Perspective" on external validity grounds,[27] while others claim there is a correlation between pornography and a decrease of sex crimes.[28][29][30]

Some researchers have claimed that sex workers can benefit from their profession in terms of immigration status. In her essay "Selling Sex for Visas: Sex Tourism as a Stepping-Stone to International Migration" anthropologist Denise Brennan cited an example of prostitutes in the Dominican Republic resort town of Sosúa, where some female prostitutes marry their customers in order to immigrate to other countries and seek a better life.[31] The customers are, however, the ones that hold the power in this situation as they can withhold or revoke the sex worker's visa, either denying them the ability to immigrate or forcing them to return to their country of origin.[31] Some customers see sex workers from other countries as exotic commodities that can be fetishized or exploited.[31] Sex workers are also at risk of judgement from family members and relatives for having been associated with the sex tourism industry.

Recently, LGBTQ+ communities have welcomed the creation of sex work through a homosexual lens. However, there have also been repercussions within this community due to the brutal treatment of the workers.[32] Many producers and proponents of pornography featuring gay actors claim that this work is liberating and offers them a voice in popular media while critics view it as a degradation of the eroticization of inequality and that advocates for this new line of cinema are only creating a new barrier for homosexuals to contend with.[32]

British feminist and political theorist Carole Pateman, who has condemned the commodification of women caused by the sex industry

Feminism is divided on the issue of the sex industry. In her essay "What is wrong with prostitution", Carole Pateman makes the point that it is literally the objectification of woman. They are making their bodies an object that men can buy for a price. She also makes the point that prostitution and many other sex industries reinforces the idea of male ownership of a woman. On the other hand, some other feminists see the sex industry as empowering women. They could be seen as simply jobs. The woman who are working them are breaking free from social norms that would previously keep their sexuality under wraps as immoral.[33]
Based on these arguments, Sweden, Norway and Iceland have criminalized the buying of sexual services, while decriminalizing the selling of sexual services.[34] (In other words, clients and pimps can be prosecuted for moneyed sexual transactions, but not prostitutes). Supporter of this model of legislation claim reduced illegal prostitution and human trafficking in these countries.[35] Opponents dispute these claims.[36]

Some feminists, such as Gail Dines, are opposed to pornography, arguing that it is an industry which exploits women and which is complicit in violence against women, both in its production (where they charge that abuse and exploitation of women performing in pornography is rampant) and in its consumption (where they charge that pornography eroticizes the domination, humiliation, and coercion of women, and reinforces sexual and cultural attitudes that are complicit in rape and sexual harassment). They charge that pornography contributes to the male-centered objectification of women and thus to sexism. However, other feminists are opposed to censorship, and have argued against the introduction of anti-porn legislation in the United States—among them Betty Friedan, Kate Millett, Karen DeCrow, Wendy Kaminer and Jamaica Kincaid.[37]

^Geisler, Erin (2009-02-11). "Pornography: A Mirror of American Culture?". University of Texas. Retrieved 2014-07-08. While statistics vary, watchdog organizations estimate the pornography industry generates between $10 and $15 billion a year in the United States. By comparison, the Hollywood box office generates about $10 billion a year.